MOTIVATIONS IN IMPULSE BUYING BEHAVIOUR: A CASE STUDY FROM MALAYSIANS IN UNIVERSITI TEKNOLOGI MALAYSIA Chuah Boon Kai Supervised by Dr. Aslan bin Amat Senin Faculty of Management and Human Resource Development Universiti Teknologi Malaysia Email: email@example.com ABSTRACT There are contradictive explanations from the prior and recent literature studies on the impulse buying behaviour. The former indicated that consumers viewed impulse buying normatively wrong while the latter revealed consumers feel motivated to buy with their impulsive trait. However, the latter study was yet to be further proven. The purpose of the study was to study the motivations of impulse buying behaviour and to prove the relationship between each set of motivation and decision which leads to impulse buying behaviour. This study only used quantitative data to analyse the relationships and Malaysian communities in Universiti Teknologi Malaysia were used as the sampling frame. A principal component analysis was first used to validate the constructs. Next, Pearson’s correlation was used to explore the relationships of each motivation dimension towards impulse buying. Then, it was followed by multiple regressions used to determine the predictors of impulse buying behaviour. As expected, the results supported each relationship studied in this research but hedonistic desires, perceived decision-making accuracy and perceived decision effort were found to be the predictors of impulse buying trait. As a recommendation, marketing strategies targeting Malaysians in Unversiti Teknologi Malaysia should be carried out by considering their potential motivations and consumers should not overuse their impulsity traits as complimentary purchasing alternative. Keywords: Impulse buying behaviour, motivations, Malaysians, Universiti Teknologi Malaysia 2 INTRODUCTION Although Rook and Fisher (1995) suggested reduction effect of consumers’ normative evaluation act towards impulse purchasing behaviour by moderating impulsive traits, many studies show that about 90 percent of consumers make purchases on impulse occasionally (Welles, 1986) and 30 percent to 50 percent of all purchases made are considered action taken by impulse (Bellenger et al., 1978; Cobb and Hoyer, 1986; Han et al., 1991; Kollat and Willet, 1967). Therefore, it seems to be that there are some circumstances which overcome the moderation effect. In the recent study, Kong (2009) discovered that there is a growing trend that Malaysian shoppers are less loyal and are more inclined to store-hop, despite of the fact that economic recession is turning consumers into more demanding, price-sensitive and cautious spenders. As the study develops deeper, the concepts of impulse buying behavior are even more complex than formerly discovered because customers may regard impulse buying is rational and reasonable in particular perspectives and situations. George Ritzer (1999) has referred to shopping malls as cathedrals of consumption while Dawn (2009) said that malls are of considerable financial significance and also become a way of life – a consumer paradise to some. Thus, underlying factors which counter-act with negative normative evaluation can be literally considered as motivations of impulse buying actions. In the study of Michon and Chebat (2004) on the use of malls by English and French speaking Canadians in Montreal, the French were found less likely than the English shoppers to use the mall for activities other than purchasing products and services, although the French shoppers did score more highly on the hedonistic dimension without significant differences in the consumption between the two groups. For this research, study will be carried out on what are the individual needs and wants which constitute the impulse tendency, specifically in Malaysia. From the cognitive perspective, complexities in marketing environment also encourages customer to respond on impulse in shopping. The Point of Purchase Institute of America has revealed that 75% of brand decisions are made in-store and this was further reaffirmed by WPP’s Sir Martin Sorrell. The study claimed that shoppers are getting less loyal and they decide purchases impulsively based on pricing, promotions, marketing collaterals and packaging (Sailendra, 2008). In a current news release from Kong (2009), Mr. Richard Hall, Executive Director of the company mentioned that low income shoppers are less loyal with an explanation 3 that they decline to shop around and tend to simply pick out any brands that are on promotion. This issue sounds interesting that consumers with limited expenses are neither price-sensitive nor attracted by product attributes. Therefore, information process overloading and decision-making difficulties in wide-expanded product lines make impulse buying behaviour to be an alternative which is relevant and less exhaustive. LITERATURE REVIEW As proposed by Hausman (2000), there are five factors which are perceived to be motivations towards impulse shopping. They are hedonistic desires, social needs, esteem and self-actualization needs, perception of decision efforts and perception of decision making accuracy. Since the hypothesis still requires further testing, the variable provided are still used to test the significance and reliability. Hedonistic Desires Many sources seem to provide conceptual support for relationship between individual hedonistic shopping motives and impulse buying behaviour. Needs for novelty, variety and surprise are amongst the higher-order needs revealed through consumer reports in the literature (Holbrook and Hirschman, 1982; Hirschman, 1980). Likewise, consumers report that several hedonistic desires are satisfied by impulse purchase (Piron, 1991; Rook, 1987; Thompson et al., 1990). Apart from that, social interaction gained in the shopping activity may also satisfy needs for emotional support. In consumers’ testimonies from some qualitative studies, they feel uplifted or thrilled after shopping. The fun or psychological lift is evident when consumers responded on the difference between the emotions evoked by the shopping experience and routine aspects of life. Novelty is shown when shopping is rather a replacement for primitive sort of hunting and the exploration of items is not any purchase value, but the reward instead. Social Needs Common feelings that the shopping experience satisfied social needs was perhaps the most regularly expressed reason given for impulse buying behaviour in previous studies. In terms of expression of social needs, the purchases appear to trigger impulse buying behaviour unintentionally. Normative events such as festival seasons and significant others’ celebration are 4 the example of the source of urge towards social needs. Thus, the motivation is somehow different from desires to fulfil safety and physiological needs that engage consumers towards specific buying. Esteem Needs Esteem needs can be expressed by shoppers by giving credential to their desires to stay fashion-conscious. Esteem-motivated shoppers emphasise on the importance of buying the right outfits because other people judge them by their appearance. Self-esteem consumers may sometimes buy an outfit without determination of the selection criteria, due to an uncommon event to attend. Needs of sense self-identity is also part of the esteem needs to be fulfilled during shopping exposure. There are some who treat an act of impulse buying a reward of having a trade-off in their routine activities in order to achieve a long-term oriented purpose. Although some researchers may find it close to or even as an example of self-actualisation, it is only labelled as that of esteem needs due to the absence of profound nature of the inspiration. For instance, some may reward themselves by impulse buying because a difficult period of enduring the task is over, or simply about the success of losing weight. Perception of Decision Making Accuracy Purchase decision involves complexes with no single criterion which suffices to be a measure of accuracy (Hausman, 2000). For example, price and product attribution factors are no longer significant to manifest as a measure of accuracy while intangible criteria which are subjective in nature is probably the better surrogate of measurement. From customers’ perspective, impulse buying is seen as the most accurate decision making tool above all means of measurement, by just pondering on satisfaction gained from the process itself. In evidence, Rook’s (1987) study has reported that 41 percent of consumers were satisfied with their impulse buying. Perception of Decision Efforts Bettman et al. (1991) found out that consumers may start to feel overwhelmed and frustrated in trying to handle with volume of complex information they experience. The situation which termed as information processing overload raises worry and unpleasantness 5 among consumers related with decision-making process (Baron, 1994; Herbig and Kramer, 1994). Bettman et al. (1991); Herbig and Kramer (1994), and Kahneman (1973), sounded equally that joint effects of decision-making complexity and information processing overload may largely weaken judgement quality or accuracy. Under such circumstances, decisions may be worsen despite of focussing on making the “right” choice (Kahneman, 1973). METHODOLOGY Malaysian communities of Universiti Teknologi Malaysia were subjects of the study. Questionnaires were used as the method of data collection. All items intended to measured the variables of this study like impulse buying behaviour, hedonistic desires, social needs, esteem needs, perception of decision-making accuracy and perception of decision effort were adopted from Hausman (2000) and past literature reviews. Factor analysis was performed to assess the validity of the construct and Cronbach’s alpha was carried out to gauge the reliability of each dimension. It was followed by Pearson’s Correlation which explores the relationships proposed in this study and multiple regressions were used to identify the predictors of impulse buying behaviour. DATA ANALYSIS 302 questionnaires have been distributed to the respondents who are encountered by survey distributors. From the total of the questionnaires distributed, 235 respondents have managed to return the questionnaire in a stipulated period and answer it completely. As the result, the response rate for this research is 77.81 percent. Therefore, the sample size that has been used for the analysis of this research is 235 respondents encountered in Universiti Teknologi Malaysia (Skudai). Principle Component Factor analysis with Vairmax Rotation were use to analyze on variables of motivation with only 6 components and factor loadings that are equal to or greater than 0.40 were retained. Principal component analysis with retained eigenvalue of 1.0 was not relevant for analysis because the seventh factor was found to have negative Cronbach’s Alpha value and its significantly loaded variables had unacceptable item total correlation value (lower than 0.3). From the findings from the data, Kaiser-Meyer-Olkin measure of sampling adequacy value is 0.845, which was considered by Kaiser (1974) as great to be used for factor analysis. 6 Barlett’s test of sphericity (based on a chi-square transformation of the determinant of the correlation matrix) is large (with an approximate value of 2880), together with associated significance level of 0.000, which is highly significant below 0.001. This result indicated that there are some relationships between the variables that included in the analysis, thus confirming the factor analysis to be appropriate. Table 1: Rotated Component Matrix Component 1 2 3 4 5 6 I often buy things spontaneously. .342 .637 .111 .039 .094 .027 “Just do it” describes the way I buy things. .228 .708 .038 .107 .227 -.063 I often buy things without thinking. .047 .775 .238 .074 .075 .016 “Buy now, think about it later” describes me .120 .668 .170 .133 .114 .244 If I see something I want, I buy it. .219 .521 -.075 .113 .105 .123 I like to shop for the novelty of it. .637 .250 .170 .189 .001 .113 Shopping satisfies my sense of curiosity. .746 .127 .137 .285 .056 .021 Shopping offers new experiences. .761 .084 .077 .292 .239 -.040 I feel like I’m exploring new worlds when I shop. .756 .170 .176 .287 .063 .020 I really feel “high” from shopping. .734 .195 .188 .215 .078 .062 I am usually ended up to shop for myself when helping .539 .120 .139 -.136 .293 .265 people to buy things. I shop mostly because my friends/family members .011 .140 .018 .161 .155 .675 enjoy shopping. I shop with family members/friends is basically to -.010 .128 .118 .019 .035 .817 entertain them. My way of shopping is more to an enjoyment with .213 -.054 -.075 .103 .206 .697 family/friends, rather than just buying things. I usually only buy things that catch my eyes. .262 .120 .025 .653 .147 .201 I always buy things that fit my identity and style. .250 .000 .091 .725 -.143 .095 The way I shop represents something different in me. .129 .201 .113 .739 .074 .089 Things I buy have my own style and personality. .250 .015 .199 .690 -.045 -.048 I don’t plan for things to shop – I have style. .100 .294 .217 .381 .320 .063 Buying things spontaneously gains better choice than .093 .393 .115 .011 .593 .178 considering things cautiously. It is impossible to compare displayed goods of the .109 -.093 .166 .108 .694 .214 similar group accurately. If I shop with quick sense, I get better products. .006 .336 .118 -.053 .686 .047 7 Component 1 2 3 4 5 6 Things that I shop with careful decision mostly ends up -.040 .334 .075 -.293 -.312 -.098 to be the right choice. Shopping without planning always surprises me with .292 .220 .028 -.022 .687 .077 better goodies. It is such a waste of time to “think before you buy”. -.027 .450 .527 .008 .218 .137 It consumes lots of energy to figure out which is the .162 .123 .750 .128 -.122 .132 best to buy. It is such a headache to make a perfect selection to .165 -.019 .732 .212 .165 -.010 shop. I always feel uncomfortable to think before I buy. .114 .312 .691 .090 .297 .032 It is hard to decide things carefully when shopping. .310 .045 .677 .057 .073 -.102 Extraction Method: Principal Component Analysis. Rotation Method: Varimax with Kaiser Normalization. Rotation converged in 7 iterations. Factor loadings that are equal to or greater than 0.40 were highlighted. Having confirmed the construct validity, reliability test was gauged. Kline (1999) suggested that values below 0.7 can realistically expected when handling psychological constructs, due to the diversity of the measured constructs. Therefore, α value ranged from 0.6 to 0.7 was the lowest range of consideration for the reliability in this research. For reliability of scale items for each dimension, corrected item-total correlation with 0.3 was utilised as the minimum standard of acceptance (Field, 2005). Table 2 shows the descriptive and reliability result of the dimensions. Table 2 : Reliability and Descriptive Results Number of Cronbach’s Number of Standard Items Alpha Samples Mean Deviation Impulse Buying Behaviour 6 0.797 235 15.4723 4.66143 Hedonistic Desires 6 0.859 235 18.2681 5.06712 Social Needs 3 0.658 235 9.7447 2.47611 Esteem Needs 4 0.775 235 14.0298 3.09037 Perception of Decision-making Accuracy 4 0.750 235 11.6298 3.12064 Perception of Decision Effort 5 0.793 235 14.6979 4.27553 8 Based on Table 3, all relationships between motivations and impulse buying behaviour obtained from the analysis are significant with the common value of 0.000 under significant value at the 0.01 level (2-tailed). All relationships between impulse buying behaviour and motivations were proven significant and positive, with the relationship effects ranged from medium to large (0.259 to 0.557). Table 3 : Pearson’s Correlation for Impulse Buying Behaviour and Motivations Hedonistic Social Esteem Perception of Perception Desires Needs Needs Decision-making of Decision Accuracy Effort Impulse Pearson .469** .259** .292** .499** .557** Buying Correlation Behaviour Sig. (2-tailed) .000 .000 .000 .000 .000 **. Correlation is significant at the 0.01 level (2-tailed). *. Correlation is significant at the 0.05 level (2-tailed). Regressions with stepwise method were used in this study. It was because the order of their importance in predicting the outcome was unknown from past literatures and there was no solid theoretical explanation for including the chosen predictors. Backward method was utilized due to its lower risk of missing predictor that in fact predicts the outcome, impulse buying behaviour (Field, 2005). Preliminarily, multicollinearity is absent in the correlation matrix given that there is no substantial correlation (r > 0.8) between predictors, which are motivations for this case. It showed that the multiple regressions were valid. Analysis of variance (ANOVA) was tested whether each model generated is significantly better at predicting the outcome than using the mean as a “best guess”. The result showed that there were 3 models were generated and F values for all models are distantly greater than 1, meaning that all model generally able to improve the predictability of impulse buying behaviour. By having the highest F-test value in the model which only includes hedonistic desires, perception of decision-making accuracy and perception of decision effort as the predictors, the model was best selected to predict the outcome variable, impulse buying behaviour. 9 Finally, the coefficients of the selected regression model were tested and the result was as shown in Table 4. All dimensions in this model showed significance level of lower than 0.05. VIF values of the current model are all well below 10 and the tolerance statistics all well above 0.2. Besides, the average VIF is very close to 1. Again, these findings conclude firmly that collinearity problem is negligible. After that, these three dimensions were used to form an equation shown below: Impulse buying behaviouri = 0.243 + 0.325Perception of decision efforti + 0.284 Perception of decision-making accuracyi + 0.181 Hedonistic desiresi Table 4 : Coefficients of the Regression Model Unstandardized Standardized Collinearity Coefficients Coefficients Statistics Model B Std. Error Beta t Sig. Tolerance VIF 3 (Constant) 1.457 1.093 1.333 .184 Hedonistic Desires .181 .053 .197 3.437 .001 .743 1.346 Perception of Decision-making .426 .083 .285 5.146 .000 .795 1.257 Accuracy Perception of .391 .062 .358 6.252 .000 .746 1.341 Decision Effort Dependent Variable: Impulse Buying Behaviour CONCLUSIONS AND RECOMMENDATIONS As most of the findings had similar understanding for each dimension with the past literatures, there were some findings which clarified some of the dimensions in the better way. One of them was the boundary of the definitions between hedonistic needs and social needs. Hedonistic desires are simply motives for self-pleasure, regardless of the way of shopping. Even if a shopper intends to buy things in favour of others, there is hedonistic desire whenever he or she enjoys the experience during the purchase. Meanwhile, social needs in shopping are needs which require interaction with friends or family in order to be satisfied. This satisfaction, however, is not attained by physiological and safety fulfilment; but the fulfilment of significant others’ needs. This statement can be proved in the factor analysis which “I am usually ended up 10 shop for myself when helping people to buy things” is regarded as a variable loaded under hedonistic desires factor, separating from social needs factor. Drawing from the results from the analysis, buying things impulsively can contribute a taste of freedom and a way to display shoppers’ playfulness and innocence. Those who are feeling even the slightest pressure of it would like to escape from the discomfort by enjoying shopping pleasures which are readily available in most cities in Malaysia. These findings implied that social needs do not play a significant role in their mind to engage in impulse buying. A possible explanation for this situation is that their impulsive intention to shop may be moderated by the presence of significant others, even though others are not judging upon it. This may be induced by their negative normative evaluation about impulse buying behaviour. Another explanation is that having cognitive evaluation of purchase selection with each other may be a common habit among those who are shopping with significant others, thus making the impulsity trait of shopping not appealing. The findings also indicated that esteem needs was not a predictor of impulse buying behaviour among Malaysians in Universiti Teknologi Malaysia. It could be inferred that most of the local communities in Univerisiti Teknologi Malaysia have limited amount disposable income for shopping, because more than 50% of respondents have disposable shopping income equal or less than RM200.00. Therefore, they may not feel readily exposed by overall product and service offering development due to restrained buying power, thus making their style consciousness deficient in purchase decision-making compared to other features like price and durability. Although global economic downturn since year 2007 was recently getting recovery, the recession was still felt by Malaysians and they were still being cautious in handling expenditures. When they decided to give up brand loyalty and go for something economical, they were facing an array of unfamiliar products. With the product differentiation of each brand in terms of price, quality and quantity nowadays, direct comparison was quite impossible and cognitive evaluation would lead to product information overload. According to Kahneman (1973), information overload is potential to trigger moderating effect by lowering perceived or actual decision-making accuracy. Therefore, it was common to have people selecting items impulsively rather than taking detailed comparison in order to have better selection choices. In fact, decision effort perceived would be the greater concern than that. As recession comes into effect, people would ensure that items they bought worth better use with lower price.